Enhancing Succession Planning Outcomes – 2023 key trends and best practices

With the market volatility of 2023 looming over many businesses, identifying and preparing potential successors for critical positions is key to stabilizing an already uncertain workplace. Succession planning can protect the organization from sudden change, reveal vulnerabilities and highlight capability gaps, and importantly preserve brand integrity and reputation.

Katrina Andrews, Managing Partner, Andrews Partnership sat down with Dr Ingo Susing, who with a PhD in Leadership Succession Management is a global leader in this space, to discuss the challenges and opportunities for corporates.

You identify strategic prioritising “character” and developmental level as further trends. What is meant by that and how do they impact Succession Planning?

With a 40% failure rate of newly appointed C-level leaders, it’s important to understand why, which mainly comes down to hiring or promotion decisions based on competency frameworks that do not prioritise ‘character’. Character describes the more stable and enduring traits of a leader that truly differentiates them. It augments personality-based assessment as it draws on integrity, cognitive ability, EQ, resilience, humility, learning agility, reliability, drive, and compassion. Furthermore, it’s key to ensure there is a cultural fit with the organisation to understand what a leader really needs to look like to be successful in that context.  This requires time to understand and create the contextual profile to ensure you know what the ‘right’ character will be that can thrive there.

A second aspect is the developmental level. Robert Keegan, a Harvard professor, studied adult development theory and found adults continue to change as they go through life. He described these stages and illustrated the key need for leaders to make decisions independently. To do this, leaders must have a set of values that are clear and personal, i.e., not guided by outside influences. In adult development, we refer to these as ‘self-authorship’, which have been shown to be important in effective leadership.

In terms of key trends, how do you see D&I impacting Succession Planning?

First, organisations are very focused on improving female representation both at board level and within internal leadership succession pipelines. Assessment and coaching are very focused on helping leaders work on the ‘how’ to ensure they ‘walk the walk’ to deliver on D&I metrics; critical as it increasingly becomes a performance metric.

Second, diversity in a broader sense, e.g., culture or age, leads to neurodiversity that has some massive advantages for businesses, which leads on to leaders’ ability to be inclusive. This is a real challenge for senior leaders who have not had the opportunity to really learn what to do. Instead, there’s a default to “let’s have a beer in the pub” mindset or a golf day. Hence, increasing awareness that these events are not appropriate and helping leaders navigate this is very important.

A second trend in Succession Planning is to do with Technology: How is Technology impacting Succession Planning?

There’s a lot happening in technology, e.g., talent management systems that are becoming more sophisticated and integrated. Technology is also playing a role in learning, rather than traditional training programmes, it brings content and enables people to learn through different ways. Furthermore, and perhaps accelerated post-Covid, are virtual assessment centres that can provide an opportunity for leadership teams to experience other key leadership talent through virtual role playing, enabling them to then make decisions down the track around individuals. AI, which has grown significantly over the past 12-months, could in the future support the analysis of assessment data and do this much faster than humans (already occurring in the legal space with Discovery processes).

Another key trend is uncertainty and accelerated change. What is their effect on Succession Planning that HR leaders should be aware of?

COVID taught us that from one day to the next the world can really change drastically. There’s a lot more emphasis now on senior leadership agility and flexibility, and how they make decisions and work through complexity. A Harvard Business Review article on the Cynefin^[1] framework explains how you can effectively work with “unknowable unknowns”, which through VUCA are now becoming more tangible and relevant than ever before. Hence, assessments and development centres are increasingly becoming more focused on these types of qualities and attributes of leaders.

[1] Boone, M. E., & Snowden, D. J. (2007). A leader’s framework for decision making. Harvard Business Review. (November 2007).

What advice do you have for HR leaders and organisations who want to improve the impact and capability of Succession Planning?

We are in a much better place today to proactively and effectively promote and support succession planning. Overall, it remains an important principle to have the business responsible, in particular, the line manager, for the challenge of developing successors and delivering on outcomes. There is still a challenge between high performers who don’t necessarily have the potential or cultural fit for expanded or new roles, hence, the importance of making ‘culture contribution’ a key performance criteria. Furthermore, psychological safety is important in the process, and there’s more firms can do to create safety around the evaluation and feedback components. I recommend ensuing conversations are confidential and signposting to all involved how information will be used, e.g., explaining reports will be shared with the individual first before anyone else.

Finally, monitoring progress on development initiatives is key and dependent on ensuring follow-up. This is made easier by aligning the development actions with an individual’s day-job to increase the likelihood of them successfully executing. For example, you can look at key successors for their role and the critical priorities and align these to their development plan. This way, learning occurs in role and changing style or mindset will occur more organically through job practice, making this effectively ‘action learning’.

What advice do you have, to embed and execute succession planning in organisations that have found it difficult in the past?

Frist, succession planning should not be just a development program for leadership, hence key to de-emphasise succession as an ‘event’ to be planned for. Instead, it should be a continuous cycle of improvement and growth. It’s key to align decisions with an individual’s expectations as often there is a mismatch, especially in terms of timeframe.

Secondly, there is often bias, particularly with boards making CEO succession decisions, when even when there’s a strong process in place, it is ultimately disregarded. Hence, succession decisions must be seen as independent of what may have occurred in the past to ensure internal and external candidates can be assessed fairly, i.e., without bias.

Sometimes having a succession plan is not enough for effective succession management. What are the strategies and tools you see as important to ensure a strong leadership bench is in place?

It’s critical to make everyone responsible for developing talent, and to incorporate that into each individual’s performance contract, starting at the very top. Yet, factors including available resources, culture, and an individual’s motivation to progress, can get in the way as some underestimate what they can actually do and achieve. Additionally, it is key to demonstrate the effectiveness of succession plans by ensuring plans are agreed upon upfront and are tracked, to drive high-quality talent reviews. This ensures data can be developed into insights, which requires a high degree of discipline and full involvement of the business as, ultimately, it needs to be an effective partnership.

What advice do you have, for HR professionals who don’t yet have a seat at the table? What steps do they need to have to elevate and be part of these dialogues?

Confidence is key. There’s a natural subservience in the function that is unhelpful. Business leaders appreciate your expertise, and to show this, you should be very clear with decision makers and build credibility through your strategic HR advice. Furthermore, being commercial and prioritising strategy, change and culture, is very important. Finally, you need to be articulate and relatable to business leaders to nurture valued relationships.

What advice would you give on communicating to individuals marked as successors? How to keep things transparent whilst managing expectations? Any derailers to consider?

Key to position succession from the outset as developmental with a focus on creating greater readiness for promotion. Leaders must have very clear career conversations with individuals, supported by a rigorous process to ensure succession does not fall to one person’s opinion. This ensures succession planning is a valued experience for all involved.

In relation to challenges, individuals are always keen for their boss’ job, yet when they understand what it takes to be successful, many step back given they realise they are not ready yet to take on the role. Some step back permanently as they feel the role may not play to their strengths or be right for them or their family. To avoid this, and a potential mismatch of expectations, you need to have transparent conversations and ensure everyone’s well informed and aligned.

Further, it helps for organisations to be a bit creative about opportunities, e.g., through temporary assignments, as these can help individuals ‘walk in someone’s shoes’ and help them understand the full transition to enterprise leader. These arrangements can be inconvenient and uncomfortable, for the firm and individual, yet it can in fact help individuals build courage along the way and support their transition.

Are there tools or frameworks to reduce biases or validate line managers assessment of potential and readiness?  

There will always be leaders who show some bias, hence it’s important to validate line managers assessments by understanding what’s important, i.e., which qualities to focus on, e.g., learning agility, flexibility, emotional intelligence and cognitive horsepower. In addressing the few that are key, you can seek out examples and evidence to support an assessment and use your judgement to validate the scores to reduce bias in the system.